Brent crude prices have climbed to $72 per barrel — their highest level since July 2025 — amid escalating tensions between Iran and the United States–Israel. NDTV examines what a sustained rise in oil prices could mean for the Indian economy.
Oil continues to be key energy source, with nearly 85% of India's oil consumption requirement met through imports. That said, the country's oil intensity has declined significantly in recent years.
Data suggests that a 10% increase in crude prices could push up both the Consumer Price Index (CPI) and the Wholesale Price Index (WPI) by 40 to 80 basis points. Additionally, such an increase may widen the current account deficit by approximately 30 basis points, adding pressure to external balances.
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Oil marketing companies (OMCs) are expected to face a negative outlook as rising crude oil prices are likely to compress their marketing margins.
It is estimated that every ₹0.5 per litre change in fuel margins could lead to a corresponding percentage impact on EBITDA (earnings before interest, taxes, depreciation and amortisation).
- Indian Oil Corp. – 7%
- Bharat Petroleum Corp. – 8%
- Hindustan Petroleum Corp. – 11%
The paints industry is also projected to have a negative outlook. Upto 40% of its raw material costs is in oil and its derivatives.
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Aviation is also set to have a negative projection as fuel is 40% of its raw material costs as well. Similarly, lubricant manufacturers have a gloomy outlook as 50% of the raw material cost is from crude derivatives. The tyre industry also has a bleak outlook as synthetic rubber, carbon black and chemicals prices are derived from crude oil which consists of 40% of the raw material basket.
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Other industries with unfavourable outlooks include cement with 40%-50% of costs directly or indirectly linked to crude and
speciality chemicals whose key raw materials costs relate to crude for many of the firms in this sector.
Oil explorer companies such as Oil And Natural Gas Corp., Oil India, Vedanta and Hindustan Oil Exploration Company Ltd. (HOEC) have a positive outlook as higher crude translates to higher realisations and higher earnings.
Generally, a $5 per barrel rise in Brent Crude would increase earnings per share of of ONGC and Oil India by 7% and 12%.
In order to actually realise this impact, crude prices need to sustain around current levelsy. Short-term fluctuations don't tend to have any major impacts on industries,
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